Category: Media
Richard Crenian on CRE Growth Opportunities
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Richard Crenian, a well-known leader in the commercial real estate market, is a visionary who has a unique ability to transform low-income properties into higher-generating income opportunities by combining research and improvements with demographics.
Toronto, ON – Aug. 25, 2023 – PRLog — Multi-tenant commercial real estate refers to properties that host multiple tenants within one building or complex. Designed specifically to accommodate and lease space to multiple businesses, organizations or individuals;
Key characteristics of multi-tenant commercial real estate properties:
Diverse Tenants: Your property hosts tenants from various industries or sectors, providing more customers and clients for your area. This diversity can help draw potential tenants.
Shared Facilities: Some amenities or facilities may be shared among tenants, such as parking areas, common lobbies, elevators, restrooms and common areas.
Lease Agreements: Each tenant typically enters into an individual lease agreement with their property owner or management company, detailing duration, rent amounts and any special conditions applicable.
Property Management: Real estate properties typically employ a management team to oversee daily operations, maintenance, and tenant relations.
Location: Commercial properties designed for multi-tenants should be placed in areas with heavy foot traffic and good accessibility to attract tenants and customers alike.
Rental Income: Property owners generating rental income from multiple tenants often experience more stable and secure income streams compared to single-tenant properties.
Tenant Mix: When carefully balanced, tenant mixes can foster synergy among businesses that will attract more people to the property and benefit all tenants involved.
Commercial real estate properties with multiple tenants include shopping centers, office buildings, strip malls, industrial parks and mixed-use developments. Such properties offer multiple tenants the benefit of spreading risk among themselves through different areas, so vacancies in one area may be offset by income from elsewhere. Unfortunately, they also present challenges related to managing different tenant needs, maintaining common areas and creating positive tenant experiences. Investors of multi-tenant commercial real estate strive to establish properties that attract and retain tenants, thus optimizing rental income and property value.
Founded in 2001 by Richard Crenian, ReDev Properties is a leading real estate investment management firm with an exceptional track record of successfully owning, developing and managing over $2.5 billion in real estate properties across Canada.
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Multi-tenant commercial real estate properties possess several key characteristics
- Diverse Tenants: Multi-tenant properties draw tenants from various industries or sectors, which not only broadens their customer and client base but also increases the property’s appeal to prospective tenants.
- Shared Amenities: Shared amenities such as parking spots, lobbies, elevators, restrooms and common areas between tenants are an efficient cost-cutting measure and add comfort and convenience for each of them.
- Lease Agreements: Each tenant typically signs their own individual lease agreement with the property owner or management company. These documents outline details such as length of occupancy, rent amounts and any specific conditions or obligations related to living there.
- Property Management: Property managers often employ dedicated teams to oversee daily operations, maintenance needs and tenant relations for an uninterrupted run of the property.
- Location: Multi-tenant commercial properties should be located in areas with heavy foot traffic and easy accessibility, to attract both tenants and customers alike.
- Rental Income: Property owners utilizing multiple tenants as tenants generate rental income that provides more stable and dependable streams compared to single tenant properties.
- Tenant Mix: Strategic tenant placement can increase synergies among businesses, drawing more visitors into your property and benefiting all tenants involved.
What Is Multi Tenant Commercial Real estate?
Multi-tenant commercial real estate refers to properties that host multiple tenants within one building or complex. Designed specifically to accommodate and lease space to multiple businesses, organizations or individuals; tenants in multi-tenant real estate could include retail stores, offices, restaurants, medical clinics, co-working spaces and more.
Key characteristics of multi-tenant commercial real estate properties:
Diverse Tenants: Your property hosts tenants from various industries or sectors, providing more customers and clients for your area. This diversity can help draw potential tenants.
Shared Facilities: Some amenities or facilities may be shared among tenants, such as parking areas, common lobbies, elevators, restrooms and common areas.
Lease Agreements: Each tenant typically enters into an individual lease agreement with their property owner or management company, detailing duration, rent amounts and any special conditions applicable.
Property Management: Real estate properties typically employ a management team to oversee daily operations, maintenance, and tenant relations.
Location: Commercial properties designed for multi-tenants should be placed in areas with heavy foot traffic and good accessibility to attract tenants and customers alike.
Rental Income: Property owners generating rental income from multiple tenants often experience more stable and secure income streams compared to single-tenant properties.
Tenant Mix: When carefully balanced, tenant mixes can foster synergy among businesses that will attract more people to the property and benefit all tenants involved.
Commercial real estate properties with multiple tenants include shopping centers, office buildings, strip malls, industrial parks and mixed-use developments. Such properties offer multiple tenants the benefit of spreading risk among themselves through different areas, so vacancies in one area may be offset by income from elsewhere. Unfortunately, they also present challenges related to managing different tenant needs, maintaining common areas and creating positive tenant experiences. Investors of multi-tenant commercial real estate strive to establish properties that attract and retain tenants, thus optimizing rental income and property value.
Founded in 2001 by Richard Crenian, ReDev Properties is a leading real estate investment management firm with an exceptional track record of successfully owning, developing and managing over $2.5 billion in real estate properties across Canada.
CRE Market – What Questions I Need to Ask?
Investment in commercial real estate can be an attractive means of creating passive income and long-term wealth creation, but it must also be undertaken carefully with great consideration given to risks and consideration of all possible outcomes. Before diving in to commercial real estate investments, take time to educate yourself about the industry. Learn about different types of commercial properties (office buildings, retail spaces and industrial properties), the local real estate market trends as well as risks involved with investing in this field.
Outline Your Objectives and Goals – Clarify your investment objectives and goals. Set out what return you want to attain, how long it will take, and the level of risk you are willing to accept. Having specific goals will enable you to make better investment decisions. Surround yourself with professionals experienced in commercial real estate such as real estate agents, property managers, attorneys and accountants who can offer invaluable guidance throughout the process. They can offer invaluable advice and provide needed support throughout its entirety. Search for Property that Meets Your Investment Goals. Conduct extensive research to locate commercial properties that align with your investment goals. When doing this, take into account factors like location, demographics, potential for growth and condition of each property you come across. Perform Due Diligence! Once you locate an ideal property, conduct thorough due diligence by inspecting it, reviewing financial statements and tenant lease agreements as well as analyzing potential risks and rewards. This step is critical in order to avoid making costly errors.
Decide the optimal financing solutions for your investment in commercial real estate. As it typically requires significant capital, various sources may need to be explored such as traditional bank loans, private lenders or partnerships between investors. Negotiation skills are of vital importance in commercial real estate transactions, so it’s vital that you aim for the best price and terms when purchasing property. Proper management is key to maintaining and increasing the value of a property. If you lack experience managing properties on your own, hiring professional management services might be the way forward.
Diversifying your investment portfolio can be beneficial in mitigating risk and increasing returns, providing diversification from different types of properties and locations that help lower risks while expanding returns. Stay abreast of changes to both local and national real estate markets. Economic fluctuations and trends may have an impactful influence on commercial properties’ performance.
Be Patient and Long-Term Focused: Commercial real estate investment is a long-term endeavor; therefore it may take time before significant returns start coming through, so remain committed to your strategy until significant returns appear.
Exit Strategy – Before investing, devise a clear exit strategy. Whether selling the property at some point in time or refinancing to take advantage of equity gains, knowing when and how you will exit is integral for maximum returns on your investments.
Always bear in mind the inherent risks involved with investing in commercial real estate, so it is crucial to remain well-informed and make well-considered decisions. Seeking advice from experienced CRE professionals may provide additional insight and increase the chance of success.
Commercial Rent Trends in Canada: What to Expect for the Balance of 2023
Staying updated with real estate market happenings isn’t an easy task, especially at a time when things are changing day to day. Similar to the residential market, the commercial market is currently going through major shifts that will impact the rest of the year.
For your convenience, we’ve rounded up some of the most important commercial and retail rent trends in 2023.
Changing prices
In the wild world of commercial real estate, a major trend has emerged that has left both buyers and sellers scratching their heads: pricing discrepancies. Owners are demanding top dollar for their properties, while buyers and tenants are hesitant to pay the steep prices. This trend is particularly pronounced in sales, but it’s also affecting leasing.
The trend is due to many factors, including interest rate increases, high inflation, and global geopolitical uncertainty. This uncertainty is causing everyone to be cautious, prolonging the process of determining the true value of a property.
Not all segments of commercial real estate are experiencing the same pricing problem, however. Industrial properties remain hot commodities, with near-zero vacancy rates driving up competition and prices in Toronto and Vancouver. Meanwhile, office properties are still in flux as companies struggle to determine their post-pandemic office needs. As a result, there has been an uptick in office subleases hitting the market.
Earlier (in December), Shopify caused a stir when it announced that it wouldn’t be using its new 348,000-square-foot office space in downtown Toronto and would instead be subleasing it. This could be a trend we expect to see more of in the future, although its prevalence will vary across industries. Despite this, some large companies like Deloitte and Google have recently expanded their Canadian office space.
On the retail front, the segment has made significant strides since pandemic measures have eased and in-store shopping has resumed. However, investors are still trying to find ways to compete with the rise of e-commerce and entice shoppers back to physical stores.
Which areas are affected the most?
According to CBRE’s Canada Retail Rent Survey, rent prices in the Western provinces saw the most extensive increase, as all cities located west of Winnipeg reported at least two rent hikes. The cities of Saskatoon and Vancouver were the most affected, with six of their key urban areas experiencing a rise in rental rates.
Demand for high-tech properties
Another trend we can currently see in the commercial property market is a shift towards high-tech features, such as property technology, that prioritize environmental sustainability, social responsibility, and cybersecurity. In the realm of office spaces, companies are looking for setups that can cater to remote workers and accommodate desk hoteling.
Staying competitive in this fast-changing landscape requires adapting to evolving market conditions and client needs, but rather than being intimidated by the idea of constant change, you should approach it as an opportunity for growth. In fact, times of uncertainty often provide the best lessons and potential opportunities.
Differences between investors
In the market, we now see a clear divide between those who have ample capital and those who don’t. While some investors are strategically waiting for the right opportunity, others are struggling to move their projects forward due to rising interest rates and tighter borrowing requirements.
However, financial hurdles, such as mounting construction and labour costs, are posing a challenge for all developers. This is something that should be taken into account for the rest of the year.
But don’t let this discourage you. To overcome these obstacles, it’s important to think outside the box and get creative with your financing and project costs. This could mean offering more free rent, providing more tenant inducements, or even lowering rent escalations to entice tenants. In short, those who can adapt and be inventive will be the ones who succeed in the real estate industry, as history has shown.
Although Canada is still facing economic challenges, the retail industry and its members are optimistic as they head into the new year – this is another key finding of the Canada Retail Rent Survey.
2023 – a promising year for the multi-suite residential rental sector
At the beginning of the year, Morguard released its Canadian Economic Outlook and Market Fundamentals report for 2023. According to it, things are looking optimistic for the multi-suite residential rental sector. That doesn’t come as a surprise since the market remained steadfastly confident throughout 2021 and 2022, despite the heightened risks.
Richard Crenian
Founder & President, ReDev Properties
Richard Crenian is the Founder and President of ReDev Properties. Ltd, a private real estate asset management company with its head office in Toronto. ReDev Properties is engaged in the development, acquisition, ownership and management of retail and mixed-use income properties predominantly located in Western Canada and Ontario. To learn more about Richard please visit www.richardcrenian.ca
Commercial Rent Trends in Canada (2023 Updated)
Staying updated with real estate market happenings isn’t an easy task, especially at a time when things are changing day to day. Similar to the residential market, the commercial market is currently going through major shifts that will impact the rest of the year. For your convenience, we’ve rounded up some of the most important commercial and retail rent trends in 2023.
Changing prices
In the wild world of commercial real estate, a major trend has emerged that has left both buyers and sellers scratching their heads: pricing discrepancies. Owners are demanding top dollar for their properties, while buyers and tenants are hesitant to pay the steep prices. This trend is particularly pronounced in sales, but it’s also affecting leasing.
The trend is due to many factors, including interest rate increases, high inflation, and global geopolitical uncertainty. This uncertainty is causing everyone to be cautious, prolonging the process of determining the true value of a property.
Not all segments of commercial real estate are experiencing the same pricing problem, however. Industrial properties remain hot commodities, with near-zero vacancy rates driving up competition and prices in Toronto and Vancouver. Meanwhile, office properties are still in flux as companies struggle to determine their post-pandemic office needs. As a result, there has been an uptick in office subleases hitting the market.
Earlier (in December), Shopify caused a stir when it announced that it wouldn’t be using its new 348,000-square-foot office space in downtown Toronto and would instead be subleasing it. This could be a trend we expect to see more of in the future, although its prevalence will vary across industries. Despite this, some large companies like Deloitte and Google have recently expanded their Canadian office space.
On the retail front, the segment has made significant strides since pandemic measures have eased and in-store shopping has resumed. However, investors are still trying to find ways to compete with the rise of e-commerce and entice shoppers back to physical stores.
Which areas are affected the most?
According to CBRE’s Canada Retail Rent Survey, rent prices in the Western provinces saw the most extensive increase, as all cities located west of Winnipeg reported at least two rent hikes. The cities of Saskatoon and Vancouver were the most affected, with six of their key urban areas experiencing a rise in rental rates.
Demand for high-tech properties
Another trend we can currently see in the commercial property market is a shift towards high-tech features, such as property technology, that prioritize environmental sustainability, social responsibility, and cybersecurity. In the realm of office spaces, companies are looking for setups that can cater to remote workers and accommodate desk hoteling.
Staying competitive in this fast-changing landscape requires adapting to evolving market conditions and client needs, but rather than being intimidated by the idea of constant change, you should approach it as an opportunity for growth. In fact, times of uncertainty often provide the best lessons and potential opportunities.
Differences between investors
In the market, we now see a clear divide between those who have ample capital and those who don’t. While some investors are strategically waiting for the right opportunity, others are struggling to move their projects forward due to rising interest rates and tighter borrowing requirements.
However, financial hurdles, such as mounting construction and labour costs, are posing a challenge for all developers. This is something that should be taken into account for the rest of the year.
But don’t let this discourage you. To overcome these obstacles, it’s important to think outside the box and get creative with your financing and project costs. This could mean offering more free rent, providing more tenant inducements, or even lowering rent escalations to entice tenants. In short, those who can adapt and be inventive will be the ones who succeed in the real estate industry, as history has shown.
Although Canada is still facing economic challenges, the retail industry and its members are optimistic as they head into the new year – this is another key finding of the Canada Retail Rent Survey.
2023 – a promising year for the multi-suite residential rental sector
At the beginning of the year, Morguard released its Canadian Economic Outlook and Market Fundamentals report for 2023. According to it, things are looking optimistic for the multi-suite residential rental sector. That doesn’t come as a surprise since the market remained steadfastly confident throughout 2021 and 2022, despite the heightened risks. With many changes in the commercial real estate market, 2023 is bound to be an interesting year. The surprise may come shortly. Will the Bank of Canada raise interest rates in Q2 to slow inflation? Bond prices have seemingly already priced this in. Follow Richard Crenian’s blog to stay updated with all the latest news.
Should I Buy Urban or Suburban Land when I am investing Today?
When it comes to cities like Toronto, is it wise to buy land? It can be a very effective formula if you can buy it with cash flow. Basically, you are using the land to generate sufficient residual income, such as parking, and using that income to offset your mortgage interest and payments.
Make sure there will be local development within 5-10 years, such as high rises, so be patient, think long term, and make sure you can cover your payments with the cash flow from that land. Think long and thing opportunities!
Smart buildings are changing the way tenants are thinking about moving into condos!
Many global properties have shifted to become fully sustainable as a result of the concept of preserving our Earth’s natural resources, implementing green construction practices, and using advanced technology.
It’s a revolutionary and exciting time for tenants, investors, and property managers as modern technology creates superior commercial and residential buildings! Smart Technology and enhanced connectivity are improving tenant experiences on all fronts thanks to the Internet of Things (IoT). Corporate tenants who are seeking new space, as well as residents looking to live in a building that is forward-thinking in terms of environmental sustainability, will find smart buildings a great option.
Thanks to the Internet of Things, smart buildings can be remotely controlled. High-quality green buildings (more energy-efficient, lower carbon footprint properties) can take the stage in the future thanks to the interconnectivity of the system, especially for tenants seeking sustainable lifestyles. Green buildings have improved our planet in the following ways:
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Upcycled architecture that reuses resources to build new properties. By reducing waste, preserving natural resources and limiting energy uses, green buildings can be extremely efficient structures that can withstand the test of time.
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Smart buildings are extremely durable. Going green is just the best way to ensure that your property will need less maintenance and improve air quality in the process.
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Healthier air. Seriously. Green buildings avoid using building materials that may contain harmful Volatile Organic Compounds (VOCs) or plastic by-products that have been linked to the release of toxic fumes and carcinogens into the atmosphere.
As the global commercial real estate market rapidly shifts to create a culture of innovation and sustainability across a wide range of property types, greener properties are becoming an emerging business strategy. As the need for sustainable apartments is amplified, so does the appeal of moving into environmentally-conscious apartments that have a reduced carbon footprint. Finding a home that has a positive impact on our planet is about more than finding a property with low rent in a great neighborhood.
The Metaverse and CRE: The money-making future
The Commercial Real Estate (CRE) market has adapted to thousands of changes over the last decade, and it has prevailed. So what’s next on the horizon? The Metaverse that allows simulated plots of land to be purchased as a way to entice potential investors!
The Metaverse is a network of 3D virtual worlds focused on social connection – it’s the Internet as a single, universal virtual world that is facilitated by the use of virtual and augmented reality devices. The metaverse is how individuals will experience the next generation of the Internet, so it’s a wise decision to continue to expand further into the CRE mainstream. It’s all about creating a digital-first experience for all users, and HSBC is doing the right thing by dipping into the virtual property market earlier than later.
With a large portion of the world dipping into the Metaverse pool, also formerly known as Facebook, it’s safe to say that the platform will quickly become prevalent in numerous CRE closing deals. Leading the charge is the banking giant HSBC – Hong-Kong based bank HSBC has announced that it would join the metaverse through the Sandbox platform. The bank will be an innovator in the field of purchasing a plot of land in the digital universe, with the main focus being on sports, e-sports and gaming.
After HSBC announced it would be joining the Sandbox, the platform’s native cryptocurrency, SAND, jumped more than 11% on Wednesday to $3.01. The token was priced at about $2.96 as of Wednesday afternoon, still up 9%.
HSBC is following in the footsteps of JP Morgan who has set up a large virtual presence in the Metaverse with a blockchain-based Decentraland. The American bank giant has already opened a lounge space in a virtual mall, hoping to increase their profits through attracting a newer audience.